Check out the cool chart from dshort.com
 

Definitely take the time to consider taking some profits and to look for good entry points if you are building a position for the long term.

Today, the President released his 2008 federal income tax returns.  He and the First Lady filed their income tax returns jointly and reported an adjusted gross income of $2,656,902.  The vast majority of the family’s 2008 income is the proceeds from the sale of the President’s books.  The Obamas paid $855,323 in federal income tax.

 

The President and First Lady also reported donating $172,050 – or about 6.5% of their adjusted gross income – to 37 different charities.  The largest reported gifts to charity were $25,000 contributions to CARE and the United Negro College Fund.

 

The President and First Lady also released their Illinois income tax return and reported paying $77,883 in state income taxes.

 

Copies of the returns are available below:

 

Download the President’s Federal 1040 form (pdf)

 

Download the President’s Federal 709 form (pdf).

 

Download the President’s Illinois State income tax return (pdf)

Also check out the Vice President’s here: http://www.whitehouse.gov/blog/09/04/15/Release-of-the-President-and-Vice-Presidents-Tax-Returns/

A GM and possibly Crysler bankruptcy look almost certain now with the latest out of the White House. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aA3.YrmEsfdA)

I don’t think the markets have completely priced in a GM and Cryster bankruptcy and the job losses that will likely come with that at all. On top of that, the housing numbers are still continuing their downtrend, for the most part.

I hate to be so bearish, especially considering the 20%+ rally in the markets, but I don’t think this bear market is over just yet.

I said in my last post that Cramer kind of deserved this attack because he obviously did some illegal things in his hedge fund and that is part of what is wrong with the financial world. I also think that Cramer’s advice is really half completely wrong and half brilliant. He has had a lot of really really wrong calls (such as calling a bottom before the giant declines in the market). However, he has been right about a lot of things. Does anyone remember when he freaked out and said that certain people in the government have no idea what is going on?

“He has no idea how bad it is out there. HE HAS NO IDEA! HE HAS NO IDEA! I have talked to the heads of every one of these firms in the past 72 hours and he has no idea what it is like out there! NONE!… My people have been in this business for 25 years and they are losing their jobs and these firms are going to go out of business and HE’S NUTS! THEY’RE NUTS! THEY KNOW NOTHING!!!”

Here is the clip:

This was before Bear Sterns collapsed. (I believe they show a chart of Bear Sterns in this video and the stock is over $100). Honestly, this exactly what Jon Stewart was saying CNBC needed. Someone to connect the dots and let viewers know when things are getting out of hand. Now, to be fair, I don’t think that Cramer was predicting the horrible recession that we would slip into. However, Cramer said right in that video that a lot of people were going to lose their jobs and that the financial firms were going to go out of business. That call was right on the money. Yet Cramer later recommended the stock on his show and the clip of him doing this was used against him by Jon Stewart. In my opinion, that is just a cheap attack. The sad thing though is that Cramer didn’t fire back at all when he really could have. Even on his show the day after he didn’t really defend himself at all.

Listen, nobody is perfect and almost nobody can consistantly make calls that are right over 50% of the time. Cramer has to make a lot of these calls as part of his show. So he is going to be wrong a lot of the time. I think this is something that many people don’t understand and they think that since he is on T.V. and sounds like he knows what he is talking about his is going to be right most of the time. I defintely think people should do their own research and not make investment decesions based on what some crazy guy on T.V. is saying. 

So, overall, I think Cramer deserves some of what Jon Stewart dished out to him on his show. However, not most of it. I think Jon Stewart and many others don’t realize that it is impossible to always be right on stock picks or the direction of the market. Jim Cramer definitely has had a few extremely good calls and kind of called the meltdown in the markets before it all happened. So for Jon Stewart to attack him like that is extremely unfair and for Cramer not to fire back (at least on his own show) is baffling.

Ok, I think that is all I will be posting on this. I don’t really like to get wrapped up in all of these media attacks and whatnot. It is really just a lot of noise and doesn’t really matter much because you should always make your own investment decesions.

(See the first too parts at TheDailyShow.com)

This was definitely a well thought out attack and he hit him really hard. I think Cramer definitely deserves it, but I don’t know about CNBC as a whole. It’s quite obvious that Cramer did a lot of illegal and unethical things in his hedge fund to amass the wealth that he has. Hedge funds are notorious for illegal activity and market manipulation because they are unregulated by nature and they can pretty much do whatever they want. Add on top of that that the SEC can’t really detect it, or don’t have enough smart people working for them to figure it out (as Cramer clearly said in the clip they were showing).

As for CNBC though, I think they do a decent job reporting and providing view points on the market. I’m not sure what Jon was frustrated about with CNBC. The fact that they didn’t predict the market would tank? The fact that they cater to people that day trade and operate hedge funds? Or the fact that CNBC is possibly trying to sell everyday Americans on buy and hold, while the bankers and hedge funds are in the background stealing and making all the money? I don’t know…but I think those kinds of attacks should be directed at the government and the regulator agencies like the SEC for dropping the ball and letting things get out of hand. It isn’t CNBC’s job to oversee the entire financial systems, keep banks from overleveraging, reveal ponzi schemes, and oust CEOs for spreading lies. I’m not saying CNBC is perfect or doesn’t need to improve, but they don’t have the power or the ability to do a lot of what Jon was complaining about. I think the content that CNBC has in the morning and during market hours is solid stuff, but after 4pm they have a lot of crap that is easy to poke fun at.

At the end Jon said that his mother bought into buy and hold / long-term investing, and it didn’t work out (most likely because of the recent crash). I think this was the source of his anger and attack on Cramer and CNBC. Sure that is sad and sure he has a right to be mad at what happened in the markets, but people have to be in control and understand their investments and understand that things like what is going on right now in the economy and the markets has happened before and it will happen again.

The scary part is that the market has broken almost all of its technical supports and it seems as if it could just continue to bleed and bleed every day. Another very troubling aspect of this market is that there has been no substantial rally since the crisis started. The government has thrown pretty much everything and the kitchen sink at the economy and the rate of decline in the market hasn’t even budgeted. 

I know this all sounds like doom and gloom, but remember that the market has never not come back from a downturn in the economy, even after the Great Depression. Also remember that investing near the bottom of a recession is an extremely good idea for long term investing. If you plan on putting money back into this market, you need to be extremely careful and understand that the market could still possibly drop 50%+ from here.

Update: After writing this article and listening to a number of news stations today, it seems as if almost every single person out there is very bearish on the stock market. One thing that I have learned over the years is that the markets often do the opposite of what most people think will happen. So it will be interesting to see where the markets go in the next few days. Again though, if you plan on putting some money in this market, keep it light.

Before the markets opened on Thursday, the topic of discussion was Obama’s housing plan that was recently announced. For those that don’t know, Obama announced a housing plan to help people that are struggling with paying their mortgage. (This is just the basics of it, if you want to read the whole plan, head over to WhiteHouse.gov.) Because the plan takes tax payer’s money and gives it to those that are struggling with their mortgage, many are opposed to it and for good reason.

So when Rick Santelli was asked what he thought about the plan, he was very passionate as he often is in describing his view. He also often polls the traders that are standing behind him working to see what they think. So he launched into a really good speech with people cheering right behind him, it was great. Check out the video of it below:

This is great television and it really wasn’t anything out of the ordinary in terms of the content and discussion that CNBC has on a daily bases. But this little segment seemed to really strike a nerve with a lot of people and it spread like wildfire across the Internet and CNBC also showed the clip over and over again throughout the day adding fuel to the fire.

The next day, at the White House, Robert Gibbs (the White House Press Secretary) fired right back at Rick Santelli! I have never seen anything like this. Gibbs is representing the White House of the United States of America and he is outright bashing someone on a cable news network! Here is that video:

Then Friday night, Rick Santelli responded to Robert Gibbs saying he read the plan and he understands it and he still has big problems with it. Then he rips up the papers and throws them in the air. LOL! This is great stuff. Watch it here: http://www.cnbc.com/id/15840232?video=1041856849&play=1

Here is the full leter sent out by the Zecco CEO, Jeroen Veth:

Dear Zecco Trading client,

I’m writing to tell you that as of March 1st, 2009, we’re increasing the minimum level of assets needed to earn 10 free trades per month to $25,000. We’re also adding a new way to get free trades: customers who make at least 25 total trades per month will also qualify for 10 free stock trades per month.

Additionally, as of March 1st, 2009, you’ll be able to earn $75 for each friend referred to Zecco Trading through our Zecco Friends program. You can use that cash to offset trade commissions or make new investments.

Why was this necessary now? Anyone who’s read a newspaper lately knows that the US and world economies have been hit hard over the past 4 months. As a result, some of the largest corporations in the world have had to cut costs and adjust to new business realities. With reduced retail trading volumes and lower interest rates, we at Zecco Trading simply could no longer provide free trades to as many people as we would like.

Many customers will not be affected by this change. For those of you who are impacted, I want you to know that I understand this is disappointing news. Since our founding, our goal has always been to provide a great value to online investors, and we’ve always made free stock trading part of that. And while we continue to provide some of the lowest trade commissions of all leading online brokerages at $4.50 each, we understand that nobody likes to pay for something that was previously free.

I’d like to emphasize that we are continuing to invest in our customer service and trading platform. You may have already noticed the improvements within our customer service team. We’ll also be upgrading to an entirely new trading platform later in 2009. This new platform will improve reliability as well as introduce advanced order types, enhanced options trading capabilities, online bond trading, better account management, single-step login, and a faster website.

So how can you qualify for free stock trades? There are two simple ways to do it:
1. Keep $25,000 in net assets in your account. This doesn’t have to be cash — it can be stocks, ETFs, mutual funds, options, or other assets.

OR

2. Make 25 total trades in a calendar month. These can be stock, ETF, or options trades. And yes, free trades count.*

For more qualification details, visit: http://www.zecco.com/trading/newpricing.aspx

As mentioned above, as of March 1st, 2009 you’ll also be able to earn $75 for each friend referred to Zecco Trading. You must refer your friend through our Zecco Friends Program, and your friend must open and fund their Zecco Trading account with at least $500. See program details here.

Thank you for your loyalty to Zecco Trading. We intend to continue earning your business as the best value for online investors.

Jeroen Veth

The blue one is the current bear market and the gray one that goes way down to -89.2% is the great depression. 

The decline in the market has recently hit a point that is about equal to bad previous bear markets. As you can see in the green and red, once the market reached about a 50% decline it was the bottom. 

What is also obvious in this chart is that we have reached this point in near record time. So if this bear market is in the process of coming to an end, it will be a rather short bear market. Another thing that I noticed from this chart is the steep -47.9% decline that happened in 1929  looks very similar to the decline that we recently saw in October and November of 2008. One last thing to note is that the market often retests the lows (as seen in the green and red) once the recovery rally has started. This is an excellent time buy into the market, on the retests. As long as we aren’t heading for another great depression, this should be a sure strategy to get back into the markets and very low levels.

The chart is from dshort.com, they also have a lot of other really neat charts. Be sure to check it out.